UPDATE: Bank of America Upgrades Abercrombie & Fitch, Believes Potential for Profit Growth is Attractive

In a report published on Friday, analysts at Bank of America upgraded Abercrombie & Fitch ANF from Neutral to Buy and raised its price objective on the company from $54 to $60. In the report, lead analyst Paul Alexander commented that, "We are upgrading to Buy as we see a number of potential sources for earnings beats and catalysts that could improve sentiment and lead to higher earnings estimates. The stock has taken a step back after a mixed 1Q, but we think the quarter's worst problems were temporary and we now see numerous areas where Abercrombie could beat expectations, particularly next year. Initiatives aimed at cutting costs and boosting average unit retail (AUR) are not yet fully baked into numbers, and we expect comp acceleration. The stock is trading at a discount to peers, but it should be at least in line given recovery potential and above average earnings growth. We are raising our F2013 EPS estimate by $0.08 to $3.30 to reflect greater confidence in the company's profit initiatives and we are modeling F2014E EPS of $4.12, 4% above consensus. We are raising our Price Objective by $6 to $60 to reflect our new estimates and a peer average multiple." Abercrombie closed on Thursday at $49.60